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Hertsmere Developments Ltd (HDL) Business Plan

Meeting: 20/06/2018 - Executive (Item 5)

5 Hertsmere Developments Limited Business Plan and Associated Matters pdf icon PDF 176 KB

The Executive is presented with the Hertsmere Developments Limited (HDL) Business Plan and is asked to recommend a number of related matters to the full Council.

 

Additional documents:

Minutes:

Decision that:

 

1.          the Hertsmere Development Limited’s (HDL) Articles of Association and Shareholders Agreement (Appendices B and C to the report) be recommended to the Council for approval and authority be delegated to the Corporate Director, in consultation with the Leader of the Council, to make any minor changes to the Governance Agreement prior to that approval by the Council;

 

2.          subject to approval of the Business Plan and an independent site valuation, the Council be recommended to delegate authority to the Leader of the Council and the Corporate Director, as shareholder representative, to transfer the sites listed in Appendix A of the Business Plan to HDL and furthermore to approve that the site/land transfers are held as an equity holding in HDL;

 

3.          the Council be recommended to authorise the Leader of the Council and the Corporate Director to transfer to HDL the freehold of the sites intended for the building of houses for sale and to grant HDL a long lease of a minimum of 125 years of the sites intended for the building of flatted developments for sale;

 

4.          the Council be recommended to authorise the Leader of the Council and the Corporate Director to grant HDL long operational leases of 30 years in respect of sites to be developed for commercial/non-residential ‘build to rent’ and to grant HDL leases of 20 years in respect of sites to be developed for residential ‘build to rent’;

 

5.        delegated authority be sought from the Council to provide loan funding to    HDL not exceeding £50M over the period of its Business Plan, that is    until 2028 and a drawdown facility of no more than £10M in any financial    year, subject to adherence to the criteria specified in sections 3.4.5   and 9 of the Officer’s report.   In addition, all loan funding to be secured as a first charge on the property assets to which the funding relates; and

 

6.        an annual update from the Executive be provided to the Council on   HDL’s operational progress and its utilisation of the sites and funding    allocated to it pursuant to the delegated powers referred to in resolutions        (1) to (5) above.  The first update to be provided at the full Council   meeting in July 2019.

 

Reasons for the Decision

 

In light of the significantly reduced government grants and the strain on the Council’s resources, it was vital that the Council secured the best possible return from its assets.  In order to deliver both residential and non-residential development opportunities, the Council had set up a wholly-owned trading subsidiary, Hertsmere Developments Limited (HDL), for delivering much needed economic regeneration and housing growth as well as assisting to generate additional Business Rates income.

The main purpose of HDL was to concentrate on property development as well as investment, both within and outside the Borough, in order to contribute towards the Council’s revenue budgetary requirements.  Its focus would be on responding more quickly and effectively to commercial opportunities where the Council was more disadvantaged by the regulations on  ...  view the full minutes text for item 5